Eircom plumps for senior lenders restructuring plan

Reuters Staff

2 Min Read

* Says rejected offers after passing Monday deadline

* To work with senior lenders to finalise revised proposal

DUBLIN, March 14 (Reuters) - Struggling Irish telecoms firm eircom said it has decided to support in principle a restructuring proposal by its most senior lenders, a process that could see the firm placed in administration.

Ireland’s largest fixed-line telephone company has been in talks with lenders for several months about the restructuring of 3.8 billion euros ($5 billion) debt.

Its independent directors were mulling proposals from the syndicate of first-lien senior lenders, the most senior in any restructuring, owed 2.71 billion euros, and another from a group of second-lien senior lenders owed around 350 million.

The proposal from its senior lenders had been seen as the most likely outcome given a weaker position from the second-lien lenders and the high chance that a recently announced attempt to find an outside buyer would be a flop, which Eircom confirmed on Wednesday.

The former telephone monopoly said in a statement it had received expressions of interest ahead of a Monday deadline but decided to reject them.

The company will continue to finalise a revised offer with the senior lenders, Eircom said.

In September the company obtained a covenant waiver from lenders to avert a possible debt default.

Singapore Technologies Telemedia, a unit of Temasek, had acquired a 65 percent stake in eircom in 2009. In December STT withdrew from the company’s board after lenders rejected its debt restructuring plans.

On Feb. 1 eircom said it hired Morgan Stanley to advise on a possible sale.